The European Union’s demands to ban Australian wine producers from using the word prosecco are based on a “legal fiction” that could breach both World Trade Organisation obligations and the Australian constitution, trade and intellectual property experts have warned.
The findings from a Monash University study of more than 100 years of wine literature come as Trade Minister Simon Birmingham escalates negotiations with his EU counterparts in Davos over the dispute, as European delegates prepare to fly to Canberra in March for further talks over the impasse that is holding back a $100 billion free trade deal.
The tensions centre on whether the booming prosecco variety – which has soared by more than 50 per cent in the past year – is a type of grape or the name of a region. In 2009, Italian lawmakers designated that it was a protected region, despite the grape being used for more than a century, and renamed the grape glera, preventing Australian growers from exporting any wine named prosecco into the EU.
Researchers from Monash University’s faculty of law studied hundreds of wine publications – including the Italian government’s own trade and marketing material for over a century to find virtually no references to the glera grape variety before 2009. Wine bibles including the Principali Vitigni Da Vino Coltivati in Italy – a five volume tome from the Italian Department of Agriculture – exclusively referred to the grape variety as prosecco.
The researchers also found that commonly used expressions such as prosecco lungo (long) and prosecco tondo (round) could only refer to a grape variety, not a place. By contrast, “expressions such as ‘long champagne’ or ’round champagne’ are certainly uncommon”.
A geographical indication, or “GI”, identifies a good from a specific region such as Champagne – and can be classed as a protected good in a free trade agreement.
Professor Mark Davison, Caroline Henckels and Patrick Emerton urged the government not to jettison the commercial interests of Australian wine producers. “The acceptance of one dubious claim without adequate scrutiny paves the way for the making of further dubious claims,” they said.
They added that given the evidence, if Australia was to cave to the EU’s demands for the trade agreement, a law prohibiting existing Australian wine producers from using their current label of prosecco raises concerns about whether such a law might be an acquisition of property on other than just terms, in contravention of section 51 of the constitution.
Senator Birmingham told his counterparts in Davos that Australia was determined to see through the negotiations. It is understood the government is willing to compromise on smaller geographic indicators – such as more obscure cheeses – but will not budge on prosecco, potentially setting up awkward negotiations in March.
Victorian prosecco producer Michael Dal Zotto said he had no sympathy for the Italian winemakers, who combined with other agriculturalists make up a powerful political lobby in Europe.
“The demand for prosecco is huge, we are a blip on the ocean compared to the volume of production they would have,” he said.
Mr Dal Zotto, whose family planted the first prosecco crop in Australia in 1999 and now makes more than 40,000 cases a year, said the uncertainty was hurting the industry.
“It makes it difficult for people to continue to invest,” he said. “We’d like the government to hold firm. It’s been a great variety for a number of years and it’s going to stay that way.”
Senator Birmingham, who will fly out of Davos on Saturday, raised the prospect of an EU trade deal not being finalised unless the terms were favourable to Australian producers.
“There’ll be quite some way to go on those in terms of what the final agreement will or won’t be, if we can get to one,” he said.